Neither Confusion nor Expense of Retaining Counsel Sufficient for Article III Standing in FDCPA Case 

Neither Confusion nor Expense of Retaining Counsel Sufficient for Article III Standing in FDCPA Case

October 7, 2022

Article III Standing

The U.S. Supreme Court’s 2016 decision in Spokeo Inc. v. Robins was a game-changer. That decision single-handedly raised the bar for a plaintiff alleging a violation of a consumer protection statute such as the Fair Credit Reporting Act. The Supreme Court held that the standing principles of Article III mean that a plaintiff may not assert a bare, technical violation of a consumer protection statute unless an injury-in-fact exists – i.e., an injury or harm that is concrete and particularized.

In the years following Spokeo, courts across the country readily applied the Spokeo principles to certain consumer protection statutes (such as the Fair Credit Reporting Act) but struggled to apply them to others (such as the Fair Debt Collection Practices Act). Oddly, one recent FCRA matter resulted in the plaintiff arguing against his own Article III standing.

Click here for a crash course regarding Article III standing decisions in FDCPA cases.

About two weeks ago the U.S. District Court for the District of New Jersey issued a strongly worded opinion regarding Article III standing in an FDCPA case that I opined might spark a trend toward plaintiffs pursuing more state court actions. 

Now the U.S. District Court for the Eastern District of New York joins the party.

Yelardy v. Miller & Milone, P.C.

In Yelardy v. Miller & Milone, P.C.,1 the plaintiff asserted an FDCPA claim against a law firm in connection with a single letter received from the firm. The plaintiff had received emergency ambulance services from the New York City Fire Department Emergency Medical Services (NYC Fire Dept. EMS) in connection with a work-related incident. Through a letter, the firm representing the NYC Fire Dept. EMS inquired about the plaintiff’s insurance information. This lawsuit followed.

The law firm filed a motion to dismiss on the basis that the plaintiff lacked Article III standing. The court noted that the plaintiff alleged only that the letter “will cause” plaintiff economic harm, “will cause” harm to the plaintiff’s credit rating, and “may cause” the plaintiff to be sued for a debt she does not owe.2 Notably, none of these allegations reflect a current (or even imminent) injury-in-fact.3

The plaintiff also alleged that she was “confused” by the letter, that the letter caused her to be “unsure as to her rights” and, as a result, she spent time and money consulting with legal counsel.4 The court held that “confusion” is not a sufficiently particularized or concrete harm. Likewise, the expense of time and money to retain counsel is insufficient to establish standing unless the retention of counsel is “inextricably bound up in a cognizable injury.”5 Stated differently, the expense of retaining counsel is not, in and of itself, sufficient to create Article III standing – the retention of counsel must be directly connected to an actual injury-in-fact.

1 2022 WL 4813016 (October 3, 2022)

2 Id. at * 2

3 Id.

4 Id.

5 Id.

Share on LinkedIn


Brett D. Watson

Chair, Retail Banking Practice

(213) 892-7938

Related Practices